8/6/2019 FinCEN Clarifies Money Services Businesses Definitions Rule Includes Foreign-Located MSBs Doing Business in U.S.

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FOR IMMEDIATE RELEASE

July 18, 2011

CONTACT: Steve Hud ak

703-905-3770

FinCEN Cla rifies Money Servic es Businesses DefinitionsRule Inc ludes Foreign-Located MSBs Doing Business in U.S.

VIENNA, Va. The Financial Crimes Enforcement Network (FinCEN) today released afinalrule, Definitions and Other Regulations Relating to Money Services Businesses, that moreclearly defines which businesses qualify as Money Services Businesses (MSBs) and are thereforesubject to anti-money laundering rules under the Bank Secrecy Act (BSA).

This rule will enable entities to determine in a more predictable and straightforward waywhether they are operating as money service businesses subject to BSA rules, said FinCENDirector James H. Freis, Jr. In addition, the rule requires foreign entities conducting theseactivities in the United States as MSBs to register. This addresses the global nature of financialcrimes.

One key element of the definition of an MSB (other than a money transmitter) under the existingregulation that if the MSB conducts $1,000 worth of transactions per person per day, theenterprise must comply with anti-money laundering rules required under the BSA. The ruleissued today maintains this threshold for all categories of MSBs other than money transmitters.An entity that engages in money transmission in any amount is subject to the BSA rules. The rulealso ensures that certain foreign-located persons engaging in MSB activities within the UnitedStates are subject to the BSA rules.

The final rule also clarifies several provisions, among them:

Revising MSB definitions to make clearer what activities subject a person to the BSA rulespertaining to MSBs.

Updating the MSB definitions to reflect past guidance and rulings and current businessoperations and to accommodate evolving technologies and emerging lines of business.

Separating the provisions dealing with stored value from those dealing with issuers, sellers,and redeemers of travelers checks and money orders in order to more readily accommodatechanges to be implemented in FinCENs pending Prepaid Access Rulemaking.

http://www.fincen.gov/statutes_regs/frn/pdf/MSB_Final_Rule_Definition_and_OtherRegulations.pdfhttp://www.fincen.gov/statutes_regs/frn/pdf/MSB_Final_Rule_Definition_and_OtherRegulations.pdfhttp://www.fincen.gov/statutes_regs/frn/pdf/MSB_Final_Rule_Definition_and_OtherRegulations.pdfhttp://www.fincen.gov/statutes_regs/frn/pdf/MSB_Final_Rule_Definition_and_OtherRegulations.pdfhttp://www.fincen.gov/statutes_regs/frn/pdf/MSB_Final_Rule_Definition_and_OtherRegulations.pdfhttp://www.fincen.gov/statutes_regs/frn/pdf/MSB_Final_Rule_Definition_and_OtherRegulations.pdf

8/6/2019 FinCEN Clarifies Money Services Businesses Definitions Rule Includes Foreign-Located MSBs Doing Business in U.S.

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Making minimal nomenclature changes with respect to certain MSB categories to help clarifydistinctions between them.

Replacing the term dealer in foreign exchange with the new term currency dealer orexchanger, a term used to include the exchange of instruments other than currency as acategory of MSB.

Importantly, whether a person is subject to regulation as an MSB does not depend on factorssuch as whether the person is licensed as a business, has employees, or is engaged in a for-profitventure. This rule clarifies that it is the activities performed that cause a person to becategorized as an MSB subject to anti-money laundering rules.

In addition, an entity qualifies as an MSB based on its activity within the United States, not thephysical presence of one or more of its agents, agencies, branches, or offices in the United States.This requirement arose out of the recognition that the Internet and other technological advancesmake it increasingly possible for persons to offer MSB services in the United States from foreignlocations. FinCEN seeks to ensure that the BSA rules apply to all persons engaging in covered

activities within the United States, regardless of their physical location.

FinCEN also todayannouncedthat the current version of the Registration of Money ServicesBusiness form (RMSB orFinCEN Form 107) is now available for electronic filing. The form isbeing updated to reflect changes made necessary by this final rule.

This rule will be effective 60 days from publication in the Federal Register. The compliancewith the registration requirement will not be required until 6 months from publication in theFederal Register to allow time for the form to be updated.

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inCENs mission is to enha nc e U.S. nat iona l sec urity, deter and detec t c riminal ac tivity, and

sa feg ua rd fina nc ial systems from a buse b y prom ot ing transparenc y in the U.S. and

internat iona l financ ial systems.

http://www.fincen.gov/news_room/nr/html/20110716.htmlhttp://www.fincen.gov/news_room/nr/html/20110716.htmlhttp://www.fincen.gov/news_room/nr/html/20110716.htmlhttp://www.fincen.gov/forms/files/fin107_msbreg.pdfhttp://www.fincen.gov/forms/files/fin107_msbreg.pdfhttp://www.fincen.gov/forms/files/fin107_msbreg.pdfhttp://www.fincen.gov/forms/files/fin107_msbreg.pdfhttp://www.fincen.gov/news_room/nr/html/20110716.html